Health Care Costs More in the United States

Over a year ago

by Robert de Neufville

In an recent Big Think essay, fellow blogger David Berreby argued that the U.S. deficit is largely a product of our increasingly high expectations about the quality of our health care. As Berreby correctly points out, the growing deficit is largely driven by health care costs. Health care costs are rising as a fraction of what people make around the world, largely because the better health care gets the better we expect it to be. The problem, Berreby argues, is that “we can’t afford to be healthy as medically possible.”

Berreby’s right about that. As people around the world get richer, it makes sense for them to spend a larger portion of their incomes on health care. Still, the best treatments available are still luxuries. We’re going to have face that we can’t all have access to them. But while the U.S. deficit may be in this sense a medical problem, the problem is not that Americans feel especially entitled to first-rate health care. As I’ve written before, the real problem—and the real reason that health care reform is so urgent—is that health care simply costs more in the United States than it does elsewhere around the world.

As Ezra Klein says, “Mountains of research show that for every piece of care you might name—a drug, a doctor visit, a diagnostic—you’ll pay far more in the United States than in other countries. That’s why seniors head to Canada to buy drugs made in the United States.” That’s not because the name-brand drugs are better in the U.S. or because the MRI scans are more revealing. For the most part, it’s because health care consumers have less bargaining power in the U.S. Americans certainly don’t live longer for all that they spend on health care. They pay more for health care—and effectively subsidize the world’s medical research—not because they demand better care, but simply because health care providers can get away with charging them more for the same care.

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